Inflation hits all time high of 31.5 pc

June 3, 2008

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By Evelyn Njoroge, NAIROBI, June 3- There seems no let-up in the soaring cost of living in the country.

According to the Kenya National Bureau of Statistics, inflation continues to rise with the rate in the month of May 2008 touching an all time high of 31.5 percent up from the 26.6 percent posted in April 2008.

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The report released Tuesday said month on month underlying inflation, which excludes food items from the Consumer Price Index (CPI) increased from 9.6 percent to 10.5 percent in May.

The bureau said food and non-alcoholic drinks index increased by 4.64 percent to 395.1 mainly due to increases in the prices of tomatoes, maize flour, rice and other food items.

A two-kilogram packet of maize flour that retailed at an average of Sh63 in April cost Sh68 in May.

Although the food shortage is a global phenomena, the situation in Kenya is compounded by the post election turmoil that saw farmers in Rift Valley Province, an area that is regarded as a the food basket of the country, displaced from their homes.

The fuel and power index also went up by 3 percent to 341 with a litre of paraffin going up from Sh68 to Sh71 in May.

Currently at $127 per barrel, oil prices are projected to hit the $200 per barrel mark in the next six months.

The report came a few days after food protests triggered by the skyrocketing food prices spread to Nairobi, where a group of activists held demonstrations demanding action from the government to curb the increases.

On his part however, President Mwai Kibaki pledged to look into means of shouldering the burden of high cost of living for Kenyans.

“I know that you are feeling the burden of the high prices of basic commodities and services,” the Head of State said in his Madaraka Day Speech Sunday.

He said that the government would systematically expand the market share of the National Oil Corporation (NOCK) to enable it to play a more effective role in stabilizing fuel prices in the local market.

The government, he added would also import 3 million bags of maize in the next two months.